Court Of Appeal Confirms Award For Diminished Earning Capacity Where Plaintiff Fully Mitigates Income Loss

In Ibbitson v. Cooper et al., the Plaintiff was injured in a motor vehicle accident, and was consequently disabled from his occupation. He was able to secure alternate employment, which paid less than his original job, and as such worked longer hours in order to make up for his loss of income from his original position. As such, he fully mitigated his losses with respect to loss of income, meaning that he was not out any money with respect to employment income. Despite this, the Court still awarded the Plaintiff $95,000.00 for past diminished earning capacity. ICBC’S lawyer appealed, arguing that there should not have been any award whatsoever, as there was no actual income loss. The British Columbia Court of Appeal dismissed the appeal, stating that:


[14]         The issue on appeal may be stated in this way – did the trial judge err in giving an award for past loss of earning capacity in circumstances where the plaintiff had fully mitigated his loss of income but where the circumstances of his replacement employment required him to work longer hours?


[19]         While in many cases the actual lost income will be the most reliable measure of the value of the loss of capacity to earn income, this is not necessarily so. A hard and fast rule that actual lost income is the only measure would result in the erosion of the distinction made by this Court in Rowe: it is not the actual lost income which is compensable but the lost capacity i.e. the damage to the asset. The measure may vary where the circumstances require; evidence of the value of the loss may take many forms (see Rowe). As was held in Rosvold v. Dunlop, 2001 BCCA 1 at para. 11, 84 B.C.L.R. (3d) 158, the overall fairness and reasonableness of the award must be considered taking into account all the evidence. An award for loss of earning capacity requires the assessment of damages, not calculation according to some mathematical formula.


[20]         In this case, the respondent clearly suffered as a result of the accident; he can no longer perform the job he was engaged in prior to the accident. He has suffered a pecuniary disadvantage as he needs to work longer hours to maintain his approximate pre-accident level of income.


[21]         The trial judge considered pre-trial earnings both before and after the accident, explaining that calculating a precise value for the extra hours was a difficult task, and chose to assess the damages “at large”. Had Mr. Ibbitson worked the same amount of hours post-injury as he had pre-injury, he surely would have been found to have suffered a compensable loss of earning capacity. His entitlement to such damages does not disappear due to his industrious efforts to maintain his level of income, exceeding his legal requirement to mitigate. I agree with the trial judge’s conclusion and analysis.


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